Revenue Audit

Bandara

evening all

I'm having my first revenue audit in about 2 years and I normally hold them in my accountants offices rather than allow them on site (for obvious reasons).

However this time they have specifically requested to visit the site as they (and I quote) "have a software package that they wish to run on the main office computer"

The site in question is a retail business that I have with a very large turnover that trades in all the various vat rates.

Has anyone any ideas what they are looking for with this mysterious software, or is this a regular thing they do now?

elgransenor

Hammertime,
I am guessing that you are in the convenience store game,as I was for 17 years.
I had one revenue audit and it was held in the accountants;nevertheless they got their pound of flesh(and an Evening Herald).
I would not have fancied what they are proposing to do to your computer but they have probably devised a program to assist them with a thorough audit of c-stores given the proliferation in the last no. of years.
They know they can access all of your true margins if you are linked to head office,as you will be if you are Centra,Spar,Londis etc.
They should be able to extrapolate a pretty accurate gross profit margin from your computer given that it will have sales figures,cost of sales through your purchase invoices,notional stock figures........with this info. they can advise your accountant that you should be achieving a margin of 'x' but your accounts are only showing a margin of 'x-3%'.
If this is the case they will be looking for the balance and if you are showing big figures for waste and/or shrinkage they will accept only figures within a certain range.
If you are not in the c-store game then you can disregard some of what I have written but not all!
Good luck anyway,I would be surprised if they do not raise an additional demand as they have to justify themselves and the time expended.:o

Bandara

thanks very much for the reply, its not a c-store but it has a lot of similar parallels. Your reply has been very helpful.

I'm half thinking of setting up the PC so the software will not load on the pc no matter what they do.

It may piss them off a bit but I'll just play dumb and pretend I know nothing about computers and I'll valiantly try to help.

My accountant has never come accross this software request before (and he is a very large practice with a lot of similar clients to me)

I'm very suspicious of it all.

Clytus

Hammertime wrote: »

thanks very much for the reply, its not a c-store but it has a lot of similar parallels. Your reply has been very helpful.

I'm half thinking of setting up the PC so the software will not load on the pc no matter what they do.

It may piss them off a bit but I'll just play dumb and pretend I know nothing about computers and I'll valiantly try to help.

My accountant has never come accross this software request before (and he is a very large practice with a lot of similar clients to me)

I'm very suspicious of it all.

Have you asked Revenue what the software does or what it/they are looking for in particular?
Revenue arent Nazis...but rather you than me havin an Audit.

niceirishfella

Yeah, i think there is no harm in asking....freedom of info etc.
Knowledge is power as they say.

Hammertime

Hammertime wrote: »

thanks very much for the reply, its not a c-store but it has a lot of similar parallels. Your reply has been very helpful.

I'm half thinking of setting up the PC so the software will not load on the pc no matter what they do.

It may piss them off a bit but I'll just play dumb and pretend I know nothing about computers and I'll valiantly try to help.

My accountant has never come accross this software request before (and he is a very large practice with a lot of similar clients to me)

I'm very suspicious of it all.

Do this. You should be suspicious, they sound incredibly incompetent.

mistermarketing

Hammertime wrote: »

evening all

I'm having my first revenue audit in about 2 years and I normally hold them in my accountants offices rather than allow them on site (for obvious reasons).

However this time they have specifically requested to visit the site as they (and I quote) "have a software package that they wish to run on the main office computer"

The site in question is a retail business that I have with a very large turnover that trades in all the various vat rates.

Has anyone any ideas what they are looking for with this mysterious software, or is this a regular thing they do now?

are you obliged to let them stick this dik into your computer?.....surley that is a big interference with your i.t system.

If i was you i would tell them that you are outright scared that the software they are running will compromise your i.t system.

Ask for statistics on the softwares credibility....(more than likely this software is new so they will not be able to give you any reliability stats)

Mr Clonfadda

about 8 years ago in Cork had to go into a clients premises to write a report to dump out all the transactions from clients accounting software for a one or two year period , so that Revenue Inspector could take it all away to analyse. They way the used to work was take a few invoices from you (high value) and track them back/through to your customers and Suppliers now with computers they can analyse everything. The Revenue Commissioners work on a code of conduct so if it is a first inspection then i would not advise you to "annoy them" as they can do a full revenue audit of everything going back for ten years if they want.

elgransenor

mistermarketing wrote: »

are you obliged to let them stick this dik into your computer?.....surley that is a big interference with your i.t system.

If i was you i would tell them that you are outright scared that the software they are running will compromise your i.t system.

Ask for statistics on the softwares credibility....(more than likely this software is new so they will not be able to give you any reliability stats)

If the old bill calls to your premises and wish to inspect documents they will need a warrant.
Revenue commissioners do not;they have the power to inspect without a warrant.
So I would imagine they would be within their rights to temporarily stick something into your computer with a view to 'inspecting records' provided they do not do damage and they are too smart for that.

KhanTheMan

Disable the CD drive and USB ports and disconnect from the internet.

When they come first ask them if they know what they are doing and that this software wont damage your computer. Let them assure you that they are experts etc and nothing will happen and they have everything under control.

Then imagine their embarrassment when they cant get the software they are so expert at installing to run. I;d be extremely worried about any software from revenue. They are tits, and could do harm to your system.

Darragh29

I imagine from a risk point of view, they would first of all take a back up of your accounting data and if they were going to run any software, they would do this back in their own office??? I'd say Hammertime they want to copy your data, do they know what accounting software you are using??? I can't see them having some software that can deal and interact with any particular accounting software package.

information

Hammertime wrote: »

evening all

I'm having my first revenue audit in about 2 years and I normally hold them in my accountants offices rather than allow them on site (for obvious reasons).

However this time they have specifically requested to visit the site as they (and I quote) "have a software package that they wish to run on the main office computer"

The site in question is a retail business that I have with a very large turnover that trades in all the various vat rates.

Has anyone any ideas what they are looking for with this mysterious software, or is this a regular thing they do now?

A computer is just a computer, it doesn't have secrets hidden in it.
I assume they have a system to interact with your accounting package and pull all the figures they need out of it.
Did they ask you what accounting package you use ?

I do know that the revenue have built a mini super computer that use neural nets to detect tax cheats.
Every time people use ROS the figures are put into this system and it calculates a score for each type of person/company.
They then use these figures to compare all the return and see which ones stand out as being different from the average.
I know a guy who worked on developing it.

It's like the old story of the revenue going into the chip shops.
Asking how much do you charge for a bag of chips, whats your overheads, how many bags of potatoes do you buy.
Based on their knowledge of the margins in chippers they could see who was cheating based on a few simple figures.

yankinlk

sounds like a good reason to change the office computers to run on linux.

antoinolachtnai

I have never heard of this before. It is possible that they just want a look. It is very wise of them to show up on site and see what they can see. You can't really carry out a proper audit of a cash business on the basis of the books alone. They are quite entitled to do this, and it is sensible for them to do, if only to establish for sure whether you are keeping proper books of account.

The software could well be something very simple, to check what programs you are installed.

I know nothing about your business, but it may also be that they have some particular view about your business. (This could be related to it being linked into some type of franchise or supplier.)

Personally, I would get the accountant to ring them up and assure them that they are very welcome at your premises, but that the computer people want to be sure that the software they are bringing will run when they actually arrive. You want to know what it is to be sure that you can help.

Remember, the revenue guy is just a guy who needs to bring back cash to his boss at the end of the day to justify the time he spends on cases and his existence as an employee (the same as all the rest of us). His time is valuable, at least to himself, and it makes sense to help him get through what he needs to do as quickly as possible.